Waiver In Gym Membership Agreement Not Too Broad And Not Barred By TCCWNA

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Contract(pd)Gym memberships are notoriously difficult to cancel. As a result, there is a fair amount of litigation over the cancellation, or attempted cancellation, of gym memberships, many of which are class actions. A recent Appellate Division decision, Mellet v. Aquasid, LLC, was one such lawsuit. As an added bonus, the decision also involves the Truth in Consumer Contract, Warranty, and Notice Act (TCCWNA), a once relatively obscure statute that has recently become popular — or controversial depending on which side of a lawsuit you find yourself — and about which I have written here and here.

In Mellet, defendant was a health club. Plaintiffs were members of the health club. Plaintiffs attempted to cancel their memberships but their requests were declined and the health club continued to bill each of them. When plaintiffs failed to pay, defendant attempted to collect these unpaid fees — which included monthly dues, late fees, collection fees, and administrative fees –  from plaintiffs. In response, plaintiffs filed a putative class action, alleging that defendant's membership agreement and the fees it charged violated New Jersey law, including TCCWNA. The trial court denied plaintiffs' motion for class certification and plaintiffs appealed.

On appeal, plaintiffs raised a number of issues, but the most interesting one involved its claim that the broad waiver in the membership agreement violated TCCWNA. It provides, in part, that "[n]o seller . . . shall . . . enter into any written  consumer contract  . . . which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller . . . as established by State or Federal law at the time." Its purpose was to prevent deceptive practices in consumer contracts by prohibiting the use of illegal terms or warranties, but it has become a favorite of plaintiff's attorneys because consumers can sue under TCCWNA even if they have suffered no injury or loss, and because the statute allows successful plaintiffs to recover attorney's fees as part of their damages. 

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